Angels and Academia:

Combining Two Worlds

Jonathan Rose

Professor, University of Toronto

Founding Member, Maple Leaf Angels

Toronto is a Hotbed of Entrepreneurship

Recently ranked as 4th Best Tech Hub in World

City has many advantages

– Size, dynamic economy; great education; peace

– Amazing diversity that connects it to the world

– Financial Centre

– Great University

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Making it Better

One thing the even-better eco systems have:

– Strong connection between early-stage investors and University

– Compare to Stanford/Berkeley in Silicon Valley

– MIT/Harvard & Boston environment

Purpose Today:

– Describe this University to Maple Leaf Angel Investors

– Describe MLA to faculty & students in this University

– How bringing us together, can make it better

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The University of Toronto

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U of T Key Facts

67,339 Undergraduates

15,817 Graduate students

11,000 Faculty

$1.2B research funding

2nd-highest # pubs in the world

Commercializes more research

– than any other University in

Canada & among top in world

Many world-leaders

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Professor Sorin Voinigescu

World-leading high-speed Analog

circuit designer

Regularly sets records for highest

frequency data transmission

Member of group that ‘predicts’

Moore’s law

Co-founder, Quake Technologies

– Another startup on the go

Recently working on 800GHz+

imaging

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Computer Science Machine Learning

Machine learning has come to the fore in the last

decade, with particular interest in the analysis of big data

– UofT has one top Machine Learning groups in the world

Geoff Hinton

– ‘Godfather of neural networks’

– DNNresearch recently acquired by Google

Craig Boutilier

– Expert in decision making under uncertainty

– Presenting here today - Granata

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Professor Moshe Eizenman

World-leading expert in Eye Tracking

– applied to aircraft simulators & driver alertness

– About to become huge in many other applications

• e.g. diagnosis of depression

– Eyes are the window to the soul!

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Professor Joyce Poon

Rising star in optoelectronic devices for

high-performance communication

– Coupling-Modulated Microrings

– Hybrid high-speed coupling-modulated lasers

– Silicon nitride on SOI photonics

Participating in Startup

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Goals and Language of Academia

Bottom line is to generate knowledge, insight, wisdom

– and people!

Time horizon is much longer than industry

Language is different

– ‘Translation’ – medical word for actually using medical research

Publish or Perish?

– But there are many who deeply care about having meaningful

impact in their field & world

A subset of academics are looking to startups

– Either directly or through graduate students

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Commercialization and Entrepreneurship

The University has many activities underway

– Each take different perspective

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UTESTJOL

T

Creative Destruction Lab

Mission:

– To create a dynamic learning environment for university-affiliated

entrepreneurs

Goal:

– Generate $50M in equity value within five years ++

Method:

– High-powered mentors; hard deliverables or get kicked out

One of the great ideas from fertile mind of Professor Ajay

Agrawal, Rotman

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Creative Destruction: G7 Fellows

Dennis

Bennie

Daniel

Debow

Nick

Koudas

Tomi

Poutanen

Dan

Shimmerman

Lee Lau

Nigel

Stokes

The Engineering Hatchery

Goal: Fifteen Years from now, we will be able to point to a

number of very successful entrepreneurs, and say that they

had a formative and enabling experience in the Hatchery

We do this by having them create real business ideas,

some of which do turn into live startups

Joseph Orozco, Executive Director

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Techno (Impact Centre)

Goal: turn revolutionary knowledge from the University

swiftly into products that benefit society

Trains graduate students in the basics of starting a

business

Houses an Incubator

One of several dynamic efforts from Professor Cynthia

Goh, Dept. Chemistry

– A serial entrepreneur

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Other Efforts

JOLT

– Part of MARs Discovery District

UTEST

– From UofT Innovations & Partnerships

Next 36

– From Rotman & many other folks

Not enough time to describe!

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Maple Leaf Angels

Investment Group

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What is an Angel Group?

A Group of accredited investors that join together

– To jointly view opportunities to invest in early stage companies

– Willing to take risks

Individuals make their own investment decisions

– But the group creates infrastructure for groups of investors to

invest at the same time

– Individuals would invest $10K-$50K at a time

– The group as a whole might invest $250K - $400K

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How Maple Leaf Angels Works

1. Early-Stage Companies apply to group

– Through web page or contacts within the group

2. Applications are reviewed

– By Director

– By Investment Review Committee

– Criterion:

• Fit within field of group

• Best opportunities to succeed!

3. Each month, 2-3 selected to pitch to group

– Will see 3 of these today

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The Key Question After Presentation

Who is interested to Explore further?

– This question will be asked today, after all non-members leave

4. If there is interest among members, follow-on meetings

– To pursue deeper questioning

5. With sufficient interest, due diligence begins

– Deeper dive on quality of technology, people, company

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Investment!

6. If result is good, negotiation!

– Over the pre-money valuation of the company

– How much money is sought

7. Investment

– Investment contracts signed

– Money paid!

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Post-Investment

Some investors become board members

Advice and mentoring ensues

Communication between company and investors

maintained

– Investors continuously help companies

– May be more than one ‘round’ of early stage investment

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Maple Leaf Angel Typicals

Startups based in Toronto & surrounding area

Seed and Early Stage companies

Total investment ranges from $250K to $1M

Pre-money valuation range $1M to $4M

– How is valuation determined?

Focus Areas:

– Information and Communication Technology

– Medical Technology

– Clean Technology

– Financial Services

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Sentient Magnetic

22 Investments since 2007

Total Invested: $9.6 Million +

Investment History of MLA

Investments in 2012-2013 Year

Total Inbound Investment Requests: 250+

Number of Investments: 4

Total Group investment: ~ $2.73M

Total Follow on Investment: ~$2.5M

Total investment led by MLA in 2012-13: $5.25M

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Sentient Magnetic

Successful Exits

4 Successful Exits

Follow on Funding: $20 Million

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Acquired by

NASDAQ IPO

(MOTR)

NASDAQ IPO

(AMRS)

Secondary

Offering

(MMC.V)

Value of Angel Group to Startups

Investment

Mentoring – including prior to investment

Feedback from investor perspective

Networking/connections

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Where Do Academics Fit In?

1. Start Companies, come pitch!

2. Participate in diligence as experts

3. Make connections for students

Viz: Band of Angels in Silicon Valley

– Has ‘book’ of 100+ diligence experts from the Valley

– Both local Director-level and Academic

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Thank you!

www.mapleleafangels.com

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